Dual Pricing versus Surcharge

In the context of card processing, dual pricing and surcharging are two different methods used by businesses to offset the cost of credit card processing fees.

 

Dual Pricing is a method where a lower cash price is displayed as a discount. This is often seen as a cash discount offered to customers who pay with cash instead of using a credit or debit card. The discounted amount is subtracted from the total, reducing the amount that the customer owes. This method is often perceived positively by customers as they see it as a discount for paying in cash.

 

Yes, in the context of dual pricing, both the cash and credit prices are typically required to be displayed. Your posted or displayed price must represent the cost of the goods if the customer pays via credit card. Alternatively, you can list both the credit card price and the cash price. Most businesses display the credit card price only, then use additional signage at the register to disclose the cash discounting terms. However, the specific requirements can vary based on local laws and regulations, so it’s always a good idea to check with a legal expert or your payment processor to ensure compliance.

 

On the other hand, Surcharging involves adding a line-item fee to the purchase price when customers pay with credit cards. This is an additional fee that businesses charge customers who use credit cards to pay for their purchases. This method can sometimes be viewed negatively by customers as they see it as an extra fee for using a credit card.

 

Dual Pricing applies very well to businesses that are entirely cash based, no customer discounting or accounts receivable payments.

 

Surcharging works well within operations that include functions price discount methods based upon retail discounts, cost plus scenarios, accounts receivable payments, sales order and rental contract deposits.  Within any of these transactions that involve a completed payment in the future, Surcharging is the only method that aligns with the Visa Core Rules and Visa Product and Service Rules.

 

In summary, while surcharging increases the price, dual pricing discounts it. Each system could influence customer perception differently.